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Termite workers build and maintain nests which house the colony. These are elaborate structures made using a combination of soil, mud, chewed wood/cellulose, saliva, and faeces. A nest has many functions such as providing a protected living space and water conservation (through controlled condensation). There are nursery chambers deep within the nest where eggs and first instar larvae are tended. Some species maintain fungal gardens that are fed on collected plant matter, providing a nutritious mycelium on which the colony then feeds (see "Diet," above). Nests are punctuated by a maze of tunnel-like galleries that provide air conditioning and control the CO2/O2 balance, as well as allow the termites to move through the nest.

Nests are commonly built underground, in large pieces of timber, inside fallen trees or atop living trees. Some species build nests aboveground, and they can develop into mounds. Homeowners need to be careful of tree stumps that have not been dug up. These are prime candidates for termite nests and being close to homes, termites usually end up destroying the siding and sometimes even wooden beams.

Mounds (also known as "termitaria"[1]) occur when an aboveground nest grows beyond its initially concealing surface. They are commonly called “ant hills” in Africa and Australia, despite the technical incorrectness of that name.

In tropical savannas the mounds may be very large, with an extreme of 9 metres (30 ft) high in the case of large conical mounds constructed by some Macrotermes species in well-wooded areas in Africa.[2] Two to three metres, however, would be typical for the largest mounds in most savannas. The shape ranges from somewhat amorphous domes or cones usually covered in grass and/or woody shrubs, to sculptured hard earth mounds, or a mixture of the two. Despite the irregular mound shapes, the different species in an area can usually be identified by simply looking at the mounds.

The sculptured mounds sometimes have elaborate and distinctive forms, such as those of the compass termite (Amitermes meridionalis & A. laurensis) which build tall wedge-shaped mounds with the long axis oriented approximately north–south which gives them their alternative name of compass termites. This orientation has been experimentally shown to assist thermoregulation. The thin end of the nest faces towards the sun at its peak intensity hence taking up the least possible heat, this allows these termites to stay above ground where other species are forced to move into deeper below ground areas. This allows the compass termites to live in poorly drained areas where other species would be caught between a choice of baking or drowning[3]
The column of hot air rising in the aboveground mounds helps drive air circulation currents inside the subterranean network. The structure of these mounds can be quite complex. The temperature control is essential for those species that cultivate fungal gardens and even for those that don't, much effort and energy is spent maintaining the brood within a narrow temperature range, often only plus or minus 1 degree C over a day.

In some parts of the African savanna, a high density of aboveground mounds dominates the landscape. For instance, in some parts of the Busanga Plain area of Zambia, small mounds of about 1 m diameter with a density of about 100 per hectare can be seen on grassland between larger tree- and bush-covered mounds about 25 m in diameter with a density around 1 per hectare, and both show up well on high-resolution satellite images taken in the wet season.[4]

Termites are weak and relatively fragile insects that need to stay moist to survive. They can be overpowered by ants and other predators when exposed. They avoid these perils by covering their trails with tubing made of faeces, plant matter, saliva and soil. Thus the termites can remain hidden and wall out unfavourable environmental conditions. Sometimes these shelter tubes will extend for many metres, such as up the outside of a tree reaching from the soil to dead branches.

To a subterranean termite any breach of their tunnels or nest is a cause for alarm. When the Formosan subterranean termite (Coptotermes formosanus) and the Eastern subterranean termite (Reticulitermes flavipes) detect a potential breach, the soldiers will usually bang their heads apparently to attract other soldiers for defence and recruit additional workers to repair any breach. This head-banging response to vibration is also useful when attempting to locate termites in house frames.